The Rich and The Rest

Glorious stuff from Polly Toynbee (with whom I am by no means always in agreement) and David Walker. I promise that even the following are only tasters:

"General mobility is a myth. The top 10% of income earners get 27.3% of the cake, while the bottom 10% get just 2.6%. Twenty years ago the average chief executive of a FTSE 100 company earned 17 times the average employee's pay; now it is more than 75 times. Since Labour came to power in 1997 the proportion of personal wealth held by the top 10% has swelled from 47% to 54%. Labour did try to tug in the opposite direction, but after Gordon Brown's last budget as chancellor axed the 10p tax rate, many of the lowest paid were left bearing a heavier burden."

"Tax consultants Grant Thornton estimated that in 2006 at least 32 of the UK's 54 billionaires paid no income tax at all."

And so, in the view of Oliver McCarthy of this place, presumably should not be allowed to vote.

"How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000. In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that. As for the poverty threshold, our lawyers and bankers fixed it at £22,000. But that sum was just under median earnings, which meant they regarded ordinary wages as poverty pay. Mistakes such as these should disqualify the wealthy from pontificating about taxation or redistribution. And yet City views carry great weight with ministers and politicians of all parties."

"The City's importance is exaggerated. Finance, including the City, insurance and high street banks, forms 7.9% of the UK's GDP, compared with manufacturing at 14.7% and property services at 16.5%. Added together, hotels, catering and telecoms account for nearly the same share of GDP as finance. As for their threats of flight, both our bankers and lawyers turned out to be remarkably immobile, most having worked for their firms for a long number of years. The warmth with which they described their London lives with partners and children suggested they would be loth to leave."

"It would have been absurd to expect mea culpas from these people just because they earned so much. What we had hoped for was more awareness, some recognition that their position needed explaining and even justification. Instead, with the exception of a couple of progressive lawyers, they simply denied they were rich."

"A lawyer admitted that he couldn't imagine surviving on an income as low as £100,000, and in discussions about higher tax bands his colleagues objected to any such low sum being used as a benchmark."

""Providing for children" was flourished as a trump card, as if spending on offspring were automatically moral and good, regardless of how other people's children fare."

Admittedly, Toynbee is on thin ice here.

"Applicants at this law firm are "becoming posher", a senior partner noted. Older partners were often grammar school, but now recruits almost exclusively have been to private schools. They are also greedier: the same older partner said he was shocked that the first question high-flying graduates ask now is about the salary."

"Grammar schools"? Did somebody say "grammar schools"?

"John Hills's charts showed how the modern UK tax system can barely be called progressive, with the top 10th of income earners paying a smaller proportion of their total income in tax than the bottom 10th. The poor are hit hard by VAT and other indirect taxes: they spend relatively more on taxable goods and services. Even when confronted with that evidence, the bankers especially gave the crudest response, saying flatly that they contributed more in cash - denying the point of a progressive tax system, which is that higher earners pay a larger proportionate share."

"One banker said he thought a family of four receives "say, £3,000 a month in their hands, and they're somewhere miles up north. They're not going to earn that sort of money, so where's the incentive for them to go out to work?" In fact, a family of four would in 2008 receive a net total of £1,328 a month. Whatever, the poor didn't deserve it."

"We heard this get-out time and again. Public money is always misspent. Our bankers airily said the administrative cost of paying tax credits was astronomical; Hills said it was actually 3%. And what was the ratio of office costs to turnover in a big City bank? A good deal more - nearer 8%, it turned out. But their error was delivered with all the aplomb of power."

"The entire public realm was dismissed in one sweep. As if he hailed from the planet Zog, one of the bankers said: "I have absolutely no idea how my taxes are spent and therefore I do not trust the system at all." But he knew his taxes would be misspent."

As Toynbee and Walker conclude:

"Here were people who might be technically adept, or good at deal-making, but as a group - with one or two exceptions - they were less intelligent, less intellectually inquisitive, less knowledgeable and, despite their good schools, less broadly educated than high-flyers in other professions. Their high salaries were not a sign of any obvious superiority. Most dismaying was their lack of empathy and their unwillingness to contemplate other, less luxurious lives. They could not see that the pleasure they derived from possessions, prospects and doing well by their children is universal and that others deserve a share of that, too."